According to her blog, "Fox on Stocks," Rachel Fox, the actress, " a successful 16 year old actress who happens to be a very successful stock trader in her spare time."  For her long term financial planning, the smartest thing Rachel Fox could do now is transfer her day trading profits into real estate to protect her gains for the future.

 Again, from her blog, "Rachel is an avid day trader."  

History has proven there is no better way to lose money than day trading stocks.  Business week reported that 82% over day traders lose money.  Forbes magazine detailed another finding with similar results.  A study by University of California Professors of Behavioral Finance Brad Barber and Terry Odean was summed up with the simple warning for those who constantly buy and sell stocks that, "The more you trade the less you earn.'

Warren Buffett, considered by many to be the greatest investor of all time and worth over $50 billion, has also stated on many occasions that the more action there is an investing, the less profit is made.

While the great majority of stock day traders lose money, over the last two centuries, profits from real estate have created about 90% of the world's millionaires.  During The Great Recession while stocks and bonds fell in value, the level of rental income in the United States actually rose.  Historically, the level of rental income increases about 5% each year in the United States.

The huge advantage of passive investing in real estate for the long term over day trading stocks like Rachel Fox is that is puts time on the side of property owner.  Time is the most powerful, unyielding force in the universe.  In investing, it can double the average rental income for an American property is less than 15 years.

Fox has been very fortunate in trading in a stock market that is reaching record highs.  Since March 2009, the Dow Jones Industrial Average is up about 250%.  For 2013 alone, the Dow Jones Industrial Average has risen almost 20%.  To her credit, Fox has done better than the Dow Jones Industrial Average with her day trading portfolio, more than doubling it last year.

Over the same period, the housing market in the United States has been strong, too.  But there is a huge, fundamental difference.  Real estate prices are rising in the United States due to the increasing demand for housing.  By far, the great majority of people will always want to own their own home, for a variety of factors.  A major reason why is that a home is the largest investment for most American families.  In addition to time and the basic desire to own one's own home, passive investing in real estate puts the experience of those who have been in the industry for decades.

By contrast, the stock market is up due to the trillions of dollars being pumped into the global financial system by
the Federal Reserve.  Whenever there is talk of the Federal Reserve pulling back from this program, known as Quantitative Easing III, the stock markets fall.  At the same time, the housing market remains strong.

Who knows, Rachel Fox may beat the odds and continue to be a successful stock day trader. 

She has already beaten long odds to become a successful actress, at a very young age.  But investing is not about beating the odds, it is about risk management.  That means buying and selling so that the odds are in your favor as much as possible.  Studies conclude that this is not day trading stocks.  But history does prove that passive investing for the long term rewards those who buy real estate.